$IPAR (Inter Parfums Inc.)

$IPAR's gross margin for European based operations for 1Q16 rose to 67.3% from 64.7% in the previous year quarter. About 40% of the increase is related to currency fluctuation, while balance is result of favorable product mix driven greatly by its Rochas brand, which generated gross profit margins in excess of 75%.

$IPAR has nominated Veronique Gabai-Pinsky, President of the Vera Wang Group, to its BoD. Gabai-Pinsky will fill the independent vacancy after the retirement of Jean Levy. Upon her election at the AGM on Sept 12, 2017, she will become a member of the Audit Committee, Nominating Committee and Executive Compensation and Stock Option Committee.

$IPAR reported a 10.2% increase in net sales to $129.1MM in 2Q17 from $117.2MM in the same quarter last year. The company
raised its FY17 sales outlook to $560-$570MM from the earlier estimate of $550-$560MM.
The EPS forecast has been raised to $1.25-$1.27 from the initial outlook in the
range of $1.20 to $1.24.

$IPAR is currently facing issues in Russian market as end consumers buying less due to higher price. The company said it will spend heavily in advertising during 2017 to regain some market share in Russia. $IPAR's distributor owns 950 stores in Russia, representing 40% market share.

$IPAR's first new scent for the Rochas brand "Mademoiselle Rochas" will initially debut in 12 countries in 1H17. The company plans to roll out Mademoiselle Rochas in several other international regions during 2H17.

$IPAR’s Europe-based operations rose 12.8% to $99.9MM in 4Q16 and US-based operations generated net sales of $34.9MM, up 17.3%. While Montblanc fragrances led the way with YoY sales growth in Europe, the sales catalyst for US-based operations was the international launch of its men’s scent First Instinct.

Perfume maker $IPAR reported 14% growth in 4Q16 net sales at $134.8MM, as operations in both the US and Europe increased double digits. Net income attributable to $IPAR doubled to $3.9MM, or 13 cents per share, from $1.9MM, or 6 cents per share in the prior year quarter.

Fragrance company $IPAR expects 2017 net sales to be $550-560MM, an increase of 8-10%. Net income attributable to the company is expected to be $1.20-1.24 per diluted share, which is up 13-17%. This outlook assumes the dollar remains at current levels.

Joseph Altobello of Raymond James asks about the ROI on advertising. $IPAR said in this environment a significant uptick on investment in promotional advertising is required, especially when trying to launch a new product. Last year $IPAR spent about 18% of sales in the SG&A line on advertising and so far this year the company is at around 21%.

Fragrances manufacturer $IPAR said the company closed 2Q16 with working capital of $338MM, including approx. $232MM in cash, cash equivalents and short term investments. $IPAR added that it is not expecting any significant pricing changes currently. However, further devaluation of British pound may affect future GMs.

In 2Q16, $IPAR's effective income tax rate was 36%. Company expects effective tax rate, excluding the pending settlement with French Tax Authorities, to be about 35% for 2016. Quarterly dividend of $0.15 per share will be paid on Oct. 14, 2016 to shareholders of record on Sept. 30, 2016.

$IPAR expects 2016 net sales to be $500-510MM. Excluding the impact of tax settlement with French Tax Authorities, net income attributable to $IPAR is expected to be $1.05-1.10 per diluted share; inclusive of the tax settlement, net income is expected to be $1.01-1.06 per diluted share for 2016.

Fragrance and fragrance-related products maker $IPAR reported 2Q16 net income attributable to the company of $5.8MM or $0.19 per diluted share, up 34% versus $4.4MM or $0.14 per diluted share in 2Q15, helped by higher net sales.

$IPAR said it is still on track to achieve 2016 net sales of $500-510MM. Excluding the impact of the nonrecurring tax settlement, EPS is expected to be $1.05-1.10. GAAP EPS is expected to come in $1.01-1.06. The company said the guidance assumes the dollar remains at current levels.

$IPAR said its 2Q16 net sales increased by 14.8% to $117.2MM from $102MM last year. At comparable foreign currency exchange rates, net sales grew by 14.2%. The growth reflects exceptional performance of Montblanc and Jimmy Choo fragrances and integration of Rochas fragrances. $IPAR plans to issue results for 2Q16 on or about Aug. 9.

$IPAR said its two largest markets performed well in 1Q16 due in part to the launch of Montblanc Legend Spirit and the continuing rollout of Jimmy Choo Illicit. Western Europe was a robust-performing market with sales of $31MM, up nearly 27% from 1Q15. North American sales came in at $29MM and Asia had sales of $21MM.

$IPAR closed 1Q16 with working capital of $352MM, including approx. $247MM in cash, cash equivalents and short-term investments and $97.8MM of long-term debt associated with the Rochas acquisition last year.

In 1Q16, $IPAR's SG&A expenses rose 15% compared to 1Q15. As a percentage of sales, SG&A expenses were 48%. For European operations, SG&A expenses increased 22% and represented 49% of sales. For US operations, SG&A expenses decreased 10% and represented 45% of sales in 1Q16.